End of the RJ revolution? (Regional News).(regional jet)(Brief Article)

The ability of US Major airlines to achieve significantly lower labor costs spells bad news for the fast-growing Regional airline segment of the market as well as the future for 35/50-seat regional jets, says JP Morgan equity analyst Jamie Baker.

"We believe the RJ revolution is drawing to a close," Baker said. He noted that mainline labor unit costs rose 37% from 1994 versus just 8% at the Regionals. This, in his view, was the primary driver for the rapid growth of the Regional sector. In effect, Major airlines outsourced routes that no longer could be flown profitably given higher labor costs and declining revenue. Now, "with mainline labor expenses expected to fall by 20%-30% over the next two years and with Regional pay unlikely to match, the marginal appeal of continued Regional growth is quickly diminishing. …

...over the past decade. In early December, Rademacher and a few dozen employees made a pilgrimage of sorts to Bombardier's regionaljet assembly plant in Montreal to take delivery of the airline's latest CRJ700, which also was the 1,000th CRJ delivered...

...over 2,000 aircraft, the RJrevolution clearly has a long way to...the market, with 84% of regionaljet orders, and 88% of deliveries...contrasting fortunes of the two regionaljet pioneers in 2001 were most...brightest growth prospects for regionaljet ...

...of the sails of the regionaljet revolution, though...000 aircraft, the RJrevolution clearly has a long...market, with 84% of regionaljet orders, and 88% of...fortunes of the two regionaljet pioneers in 2001 were...

The regionaljet is the most significant advance in...renaming the MD-95, calling the 717 a regionaljet aimed at 300-mi. sectors. The RJ...are weakened. Exciting though the RJrevolution may be, there are caveats to be considered...

...executives agree that the industry is in the midst of an "RJrevolution" that has changed the complexion and direction of the Regional...clauses--by aircraft in the 70/90-seat range. The regionaljet industry continues to be a work in progress. For example...